Kudi Coffee opens its first store in Dubai and rolls into the Middle East market

Kudi Coffee Dubai recently opened its first store. Located in Deira's Business Village, the store is not directly operated by Cudi, but adopts the "associate + regional partner" approach. In terms of supply chain, Kudi Coffee has already completed the procurement of local Arabica coffee beans.

Since the opening of its first store in October 2022, Cudi Coffee has grown to become the fourth largest coffee brand in the world, with more than 6,300 stores in more than 300 cities in 28 countries. Founded only one year ago, Kudi Coffee officially launched its internationalization strategy, entering markets such as South Korea, Indonesia, Canada, Japan, Australia and now targeting the Middle East.

Coffee consumption in the Middle East has been growing rapidly in recent years, especially in the United Arab Emirates, Saudi Arabia and Qatar, where the young population is increasingly interested in coffee culture, and there is huge room for foreign brands to develop markets in the Middle East. According to Statista, Dubai's coffee market alone will generate revenues of more than Dh1 billion in 2023, while the UAE's per capita coffee consumption has increased to about 1.36 kilograms, and its coffee market will grow at an annual rate of 8.4% between 2023 and 2029, making it an even more attractive market for coffee brands in the UAE. Coffee brands in the UAE will have a better chance to lead the Middle East coffee market trend.

Koody's is following the domestic strategy of "low price to grab the market" by offering a special pricing of "10 cedis for the whole market" in its first store. Comparing with the neighboring competitors, the mainstream coffee shops in Dubai, including Caribou, Costa and Starbucks, are all priced at more than 20 dirhams. The low price can help Kudi open up the market quickly, but the long-term development depends on the localization ability of Kudi's products. For example, "Karak Tea/Chai", which is popular among Indians and locals in Dubai, can be purchased for 1 dirham in many street stores. The price war will never end, but relying on new products to dig deeper into the local equivalent price space may be the next step in Kudi's development focus.

Kudi coffee "old rivals" Ruixing in fact has long looked at the Middle East market: in 2019, Ruixing signed a cooperation agreement with the restaurant chain Americana Group, in the Greater Middle East and India to carry out the new coffee retail business, but the subsequent financial mine incident has made the cooperation has not been followed up.

In recent years China's new tea drink brands have chosen to go overseas in search of new growth. For coffee brands going to sea in the Middle East, Dubai is more of a must-contend place: stable consumption capacity, more than 90% of the foreign population, and even coffee beans can be sourced locally, leaving coffee brands with the challenge of brand promotion, product localization, and supply chain support, in which brands such as Kudy's Middle East Road is yet to be further explored.